A group of six banks and a global auditing firm have completed a new blockchain trade finance test focused on the Hong Kong market.

Revealed today, the group includes participation from the Hong Kong Monetary Authority (the region’s de facto central bank), Bank of China, Bank of East Asia, Hang Seng Bank, HSBC and Standard Chartered Bank, with Deloitte working as a facilitator for the project.

Involving banks, trade finance buyers and sellers, and logistics companies, the trial is said to have focused on the legal, regulatory, governance and data security aspects of the technology.

The group said of the experiment:

«This proof of concept has demonstrated the application of DLT in digitizing paper-intensive processes through smart contracts, reducing the risk of fraudulent trade and duplicate financing, and improving the transparency and new product innovation of the industry as a whole.»

For the second phase of the project, Standard Chartered said it will be inviting clients to take part in a forthcoming pilot stage. Li Shu-pui, executive director of the HKMA, affirmed that his organization would continue to support the effort due to its potential.

The group’s members further stressed the potential benefits for Hong Kong, arguing that the platform could come to make it easier and faster for businesses to operate in the region.

«With great vision and determination, Hong Kong is well positioned to lead the region on trade finance DLT application,» Paul Sin, partner at Deloitte China, said.